What a make-good clause usually requires
A make-good clause sets the condition in which the tenant must hand the premises back. Clauses vary widely, but they commonly require the tenant to:
- remove its fit-out, signs, fixtures, equipment and belongings;
- repair any damage caused by installing or removing them;
- reinstate the premises to their original condition, or to a described base-building standard;
- repaint, replace floor coverings or clean to a set standard; and
- return keys, access cards and security devices.
Reading the clause
The exact words matter. ‘Original condition’ is not the same as ‘good repair’, and a clause tied to a plan, a schedule or a condition report is measured against that document. Check whether:
- the landlord can choose to keep some or all of the fit-out instead of having it removed;
- the landlord can do the work itself and charge you for it;
- fair wear and tear is excluded; and
- other documents, such as an agreement for lease, a fit-out deed or the repair clause, add to the obligation.
Many clauses exclude fair wear and tear: the ordinary deterioration that comes from reasonable use and the passage of time. If your clause does not exclude it, the obligation may be stricter than you expect. Depending on its wording, a make-good clause can require more than the condition the premises were in when you moved in.
Removing the fit-out and reinstating
Removing a fit-out is often the largest cost: partitions, ceilings, floor coverings, cabling, plumbing, kitchens and shopfronts. The clause may also require you to make services safe and repair the marks left behind.
If you took over the previous tenant’s fit-out, check how the lease treats it. Some leases make the incoming tenant responsible for removing it at the end, even though it was not theirs to start with.
Under a retail lease, the landlord is not responsible for maintaining things the tenant is entitled or required to remove at the end of the lease, so any obligation for those items comes from the lease. The landlord remains responsible under section 52 of the Retail Leases Act 2003 (Vic) for maintaining the structure, fixtures, plant and equipment, unless the tenant’s misuse caused the need for repair. A make-good clause that would make the tenant repair those things may be open to challenge as inconsistent with the Act (s 94), but the answer depends on the wording and the facts. See landlord repairs under section 52, and our guide to the Retail Leases Act 2003 (Vic).
Protect yourself at the start
Many make-good disputes turn on evidence of the starting condition. Before you move in or start your fit-out:
- take dated photographs and video of every area, including ceilings, floors, walls, the shopfront and services;
- ask for a condition report and agree it with the landlord in writing, ideally attached to the lease;
- keep the fit-out plans, approvals and invoices; and
- negotiate the clause itself, for example to exclude fair wear and tear or to limit reinstatement to the condition shown in the report.
A lease review before you sign is the time to settle these points.
Timing: start before the lease ends
Make-good clauses commonly require the work to be finished by the end of the lease, while you are still the tenant. Start planning months ahead: read the clause, get quotes, and ask the landlord to confirm the scope of work in writing before you start.
Leaving it late creates two risks. If you stay in the premises after the lease ends to finish the work, you may have to pay for that time under the lease’s holding-over clause. And if the work is not done, the landlord may do it and claim the cost from you.
If you are ending the lease early, deal with make good in the surrender. See surrendering a lease.
A cash settlement instead of the work
A landlord planning to refurbish, or to re-let to a tenant who wants a different layout, may not want the work done at all. You can then negotiate a payment instead of the work. Record any agreement in writing, ideally in a deed that:
- releases you, and any guarantors, from the make-good obligation;
- deals with the return of the security deposit or bank guarantee; and
- says what, if anything, you may leave behind.
If the landlord claims damages
If the tenant does not make good, the landlord may claim damages for the breach. In a case about alterations a tenant made without the landlord’s consent, the High Court held that the landlord’s loss was the cost of restoring the premises to the condition they would have been in without the breach, rather than the fall in the property’s value. The work must be necessary to produce that condition and a reasonable course to adopt. The award in that case also included rent lost while the restoration work was done. Make-good claims may be assessed in a similar way, but each depends on the clause and the evidence.
When you receive a claim, check that it covers only what the clause requires, allows for fair wear and tear if the clause excludes it, and is supported by reasonable quotes or invoices. For landlords, the same points make a claim stronger, together with evidence of the starting condition.
Under a retail lease, a make-good dispute generally goes to mediation at the Victorian Small Business Commission before VCAT can hear it. See lease disputes.
Getting the security deposit back
Under a retail lease, if the tenant has performed all of its obligations under the lease, the landlord must return a security deposit within 30 days after the lease ends. That rule does not affect any lawful entitlement of the landlord to use the deposit, so unfinished make-good work may give the landlord grounds to keep some or all of it, to the extent the lease allows. Under other leases, the lease sets the terms. For a bank guarantee, check what the lease says about its return. See security deposits and guarantees.
How we help
- Reviewing and negotiating the make-good clause before you sign.
- Advice on what your clause requires, before you spend money on the work.
- Negotiating the scope of work, or a cash settlement, with the landlord.
- Responding to a make-good claim or, for landlords, preparing and pursuing one.
- Recovering a security deposit.
Start with a free 15-minute phone call. A lease review costs $1,100 including GST ($1,000 + GST) for most leases. For other work, we quote in writing before we start.
Common questions
Can’t see your question? Call 1800 776 529 or send us a message.
It is the tenant’s obligation to return the premises in the condition the lease requires when the lease ends. That usually means removing the fit-out and signs, repairing damage and reinstating the premises, but the exact obligation depends on the clause.
If the lease requires it, yes, unless the landlord agrees otherwise. A landlord that plans to refurbish may accept a payment instead of the work. Put any agreement in writing.
Many clauses exclude fair wear and tear, which is the ordinary deterioration from reasonable use over time. If yours does not, the obligation may be stricter. Read the clause before you agree the scope of work.
Under a retail lease, the landlord must return a security deposit within 30 days after the lease ends if you have performed all your obligations. If make good is not done, the landlord may be entitled to use some or all of the deposit, to the extent the lease allows.
Law referred to
- Retail Leases Act 2003 (Vic) ss 24, 52, 87 and 94.
- Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8.
Last reviewed: October 2026, by a Victorian solicitor with a current practising certificate. This page is general information about Victorian law as at October 2026. It is not legal advice about your lease.
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